CONCORD -- The Trump administration has given the state of New Hampshire until the end of 2018 to eliminate health care provider payments that support Medicaid expansion -- or else face a "deferral or disallowance" of the entire New Hampshire Health Protection Program.

In a stunning Friday night development, Gov. Chris Sununu revealed since 2016 federal regulators have been investigating the legality of non-federal share financing of Medicaid expansion that the Republican-led Legislature and then-Democratic Gov. Maggie Hassan put in place last year.

Sununu hailed a 16-month reprieve that the U.S. Health and Human Services Department and its Centers for Medicare Medicaid Services (CMS) has now given New Hampshire to bring its program into compliance with federal law.

"The result of this successful negotiation is that the structure of New Hampshire's Medicaid Expansion program will continue until the end of 2018. We appreciate the additional time and flexibility being provided by the Trump Administration," Sununu said in a statement.

"The bottom line is that as a result of our negotiations, there will be no change to the program through the end of 2018 and the 50,000 New Hampshire residents participating in the Medicaid Expansion will see no change in their coverage through the current re-authorization."

Medicaid expansion was a significant bipartisan achievement for Hassan who promoted it heavily during her narrow election victory over Republican Sen. Kelly Ayotte last November.

Hassan's spokesman shot back that this is part of the Trump administration's plan to have Obamacare wither and die on the vine.

"This is a deliberate attempt by the Trump Administration to sabotage New Hampshire's bipartisan Medicaid expansion plan that is providing quality, affordable health care -- including coverage for substance use disorder and mental health services -- to over 50,000 hard-working Granite Staters," Hassan Communications Director Aaron Jacobs said in a statement.

"Following the legislature's decision to pursue the state-level funding structure established in 2016, then-Gov. Hassan worked closely with the Obama Administration to ensure full federal funding of the program, and it is disappointing that the Trump Administration is trying to rip that away. It is incumbent upon the governor and Republicans at the state level to work with the Trump Administration to ensure continued funding of the program..."

At issue are New Hampshire law changes that addressed who would foot the bill for Medicaid expansion costs once the federal government no longer picked up 100 percent of the bill.

This changed in 2017 when federal reimbursement to states fell to 95 percent.

Under a 2016 state law change, state dollars would not cover those new costs. Instead they would be paid for with insurance premium tax payments and "voluntary provider contributions" by hospitals and insurance companies.

GOP legislative leaders estimated that non-federal cost for New Hampshire to be $20 million to $25 million a year.

CMS Medicaid Director Brian Neale informed New Hampshire Health and Human Services Commissioner Jeffrey Meyers in a July 25 letter that provider donations are not allowed under federal law "except in very limited circumstances" and not the way New Hampshire uses them.

Medicaid expansion goes out of existence in New Hampshire at the end of 2018 unless lawmakers reauthorize it.

Neale said federal regulators have decided to give policymakers time to make the needed fixes to New Hampshire's law.

"We understand that there is a need for a transition period," Neale wrote. "While CMS has concerns that New Hampshire may be out of compliance with federal requirements, we expect by the end of New Hampshire's next legislative session, changes will be put in place ... to bring the state's non-federal share financing into compliance with applicable federal statutes and regulations."

But Neale made it clear that the state's failure to act would come at a future price.

"To the extent New Hampshire's next state budget does not include necessary changes to achieve compliance, the state may be faced with financial consequence that could include a deferral or disallowance action," Neale concluded.

New Hampshire HHS Commissioner Meyers said he was grateful for the flexibility federal officials have offered.

"The department is pleased the CMS worked with New Hampshire to ensure the continuation of the program," Meyers said.

Greg Moore, state director of the fiscally conservative Americans for Prosperity, warned lawmakers in 2016 that provider payments could be illegal because that's what the Bush administration ruled in 2003 when it forced New Hampshire to get rid of provider taxes which had leveraged bonus Medicaid money to the state throughout the 1990s.

"Now, we're learning that the scheme to require providers to pay the state share is collapsing and will likely leave taxpayers holding the bag," Moore said.

"Moreover, this meltdown has forced Gov. Sununu to try to patch up the bad decision by the Legislature and Maggie Hassan to put adults who can work, but often don't, on taxpayer-funded health care instead of using his time negotiating the terms of the work requirements included in the state budget. The Legislature needs a plan to unwind this mistake, since our congressional delegation has shown themselves completely ineffective and willing to stand by and watch while Obamacare implodes."

The New Hampshire Democratic Party called the Trump administration actions "shameful."

"Trump @SecPriceMD are trying every trick in the book to sabotage ACA (the Affordable Care Act) and the benefits tens of thousands in New Hampshire depend on," the party posted on Twitter.

The New Hampshire Republican State Committee accused Hassan of concealing this probe so she could politically profit.

"Maggie Hassan knew about this as governor. She was too busy brushing this bombshell under the rug during her Senate campaign," the New Hampshire GOP said in a statement.

klandrigan@unionleader.com

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